*
Seminar participants also expected the State Bank to issue documents guiding via-bank payment for goods traded through goods exchanges in derivative transactions, the Ministry of Finance to provide guidance on taxes and charges on these activities, and the Ministry of Industry and Trade to facilitate access to relevant information.
As proposed by Chong Kim Seng, executive officer of Berharl
At present, Vietnamese goods exchanges still apply the spot delivery mode and standards different from those currently applicable to international goods exchanges and in general operate in the absence of a comprehensive legal framework. Current provisions governing this domain are only found in the Commercial Law, Decree No. 58 and Ministry of Industry and Trade Circular No. 03, which inadequately regulate the operation of goods exchanges, especially the current steel, cashew nut, coffee and sugar distribution systems, according to the market supply-demand balance.
* State Bank Deputy Governor Tran Minh Tuan recently told the Dau Tu (Investment) Newspaper that the State Bank had found the provision of foreign-currency loans for enterprises of all kinds too generous and no longer reasonable and planned to consider narrowing down economic entities eligible for those loans specified in State Bank Decision No. 09/2008/QD-NHNN on extension of foreign-currency loans by credit institutions to resident borrowers.
In the future, foreign-currency loans will only be provided as supports for essential imports and banks granting these loans will have to secure recoverability of these loans. Importers of goods not encouraged for import as identified by the Ministry of Industry and Trade will not be eligible for foreign-currency loans.
This move aims to reduce the foreign-currency deposit interest rate, especially that on US dollar deposits, and thereby mitigating the interest rate pressure of
* In an effort to rein in inflation and stabilize the macro-economy, the Ministry of Industry and Trade has requested state economic groups, corporations and companies under its management to suspend commencement of new projects funded with state budget and government bond capital and restructure or withdraw state budget or government bond capital for ongoing projects and step up the progress of important projects for completion in 2011.
In April, these economic groups should submit to the Ministry lists of projects subject to investment withdrawal or reduction for reporting before the Government’s May 2011 regular meeting.
The Ministry also requested the Finance Department to coordinate with concerned units in proposing the Ministry of Finance to apply taxes and charges to regulate profits from the export of steel and cement, the production of which still enjoys low input costs of electricity and some other materials.
* As reported by the Vietnam Economic Times, the customs service has recently proposed two groups of solutions to prevent loss of tax revenue and help reduce the trade deficit in 2011.
They include stricter control of the import of unessential goods based on a clear classification of goods to be used in production separately from consumer goods, serving as a ground for management authorities to regulate the provision of loans for import, consider granting automatic import licenses, maintain a rational consumer goods import structure or apply some tax-related measures and effective technical barriers to limit import of unessential goods.
In 2011, the customs service will closely inspect import duty calculation prices in the stage of customs clearance by increasing the number of groups of goods items subject to risk management from current 13 to 20, and accelerate the development of a new price database and consider purchasing price information from some prestigious foreign companies and gathering information from overseas trade counselors.
A plan on development of a database on goods classification, focusing on prior classification, will be worked out and a decision to set up advisory councils for goods classification at customs offices at all levels will be issued.
* For improving the operation of real estate trading floors, which number about 700 nationwide, Construction Deputy Minister and Vietnam Real Estate Association Chairman Nguyen Tran Nam requested formulation of a mechanism for stricter post-operation inspection and severe penalties against violations of these floors in a newly released draft circular guiding the grading of real estate trading floors.
These floors will be required to perform and report a prescribed minimum number of real estate transactions in a month or a quarter.
Other experts also proposed modifications to current real estate management policies, including allowing real estate businesses to choose to open or not to open a real estate floor and encouraging them to develop their floors up to international standards in order to avoid prohibited “underhand” transactions and make the real estate market more transparent.
* Also concerning real estate, the Ministry of Construction has recently sent to the Ministry of Finance an official letter requesting non-collection of personal income tax and registration charge for authorization of real estate transfers.
The Ministry argued that such authorization is merely a civil transaction because the civil law permits a real estate owner to authorize another person to exercise his/her rights to sell, lease or mortgage such real estate and this transaction does not give rise to transfer of real estate ownership or use rights but only changes the party exercising the owner’s rights.
* It is necessary to diversify channels to raise capital for real estate enterprises in light of current restrictions on bank loans for non-productive sectors, proposed Le Chi Hieu, Chairman of the Board of Directors of Thu Duc House Development Company, adding that people in need of a home always wish to contribute money to real estate projects. More specifically, there should be regulations permitting real estate developers to issue house saving certificates to persons wishing to buy to-be-built houses or apartments (each certificate equals one square meter of such house or apartment).
Tran Minh Hoang, Chairman of the Board of Directors of Vinaland also cited developed countries’ experience in permitting real estate enterprises to set up real estate trust funds, house saving programs and property-guaranteed bonds to raise funds for real estate projects. Accordingly, enterprises having rights to use a land plot may raise capital from interested people and secure repayment with such rights. In case these enterprises become unable to repay contributed capital, the State would auction their land use rights to compensate capital contributors.
* Avoidable problems caused by insufficient regulations guiding the Investment Law: Quang Minh from the Saigon Economic Times pointed to the absence of specific guidance on non-discriminatory treatment of domestic and foreign investors since the Investment Law was enacted five years ago.
Until now, many overseas Vietnamese investors still don’t know how to carry out investment procedures, like foreign investors, like domestic investors or they can choose applicable regulations.
At the end of 2010, the Government issued Decree No. 102 requiring enterprises with over 49% of charter capital owned by foreign investors to have investment projects and make investment registration in the capacity as economic organizations. However, since then no further guidance on transfer of shares to change foreign holding compared with the 49% cap has been provided, deterring foreign investors from transferring shares or projects in
Though the investment law, construction law and law amending laws concerning capital construction investment and many guiding documents have been issued, such terms as investment project, econo-technical explanation, pre-feasibility or feasibility project report, investment report, etc., remain neither uniformly nor clearly guided. Every investor still had to do things asked by management authorities, whether they are necessary or not. This reality costs investors extra-expenses, time and efforts.
Government Resolution No. 70/2010 on simplification of administrative procedures, including those for investment, also did not require clear definition of those terms.
The most burning issue confronted by investors is land procedures. Under the current investment law, investment procedures must be carried out after completion of environmental procedures, before completion of construction procedures and either before or after land procedures. In fact, investors may be required by local administrations to complete in advance land procedures in order to secure the implementation of their projects together with many relevant formalities, such as financial capacity report, recommendation of project locations, explanation of land use needs and competent authority’s approval of state capital use.
To further improve the investment environment, Quang Minh proposed early promulgation of regulations permitting simplification of investment procedures, particularly those for acquisition of shares by foreign investors, modification of investment licenses or certificates, capital transfer, project transfer between companies within the same groups, merger with wholly foreign-owned enterprises, suspension or delay of project implementation, liquidation of investment projects; and pruning of unnecessary procedures for commencement of projects, especially those created by local administrations.-